The fine is expected to be the largest issued in the department's history, according to a source familiar with the matter.

The department's largest penalty to date was a $1 million fine imposed against Kaiser in 2002 to settle a case surrounding the death of a 74-year-old San Leandro woman whose treatment was allegedly delayed at the health maintenance organization's Hayward hospital.

Kaiser announced in May it would shut down its 2-year-old kidney center and transfer its 2,000 patients to UCSF and UC Davis, after news reports about bureaucratic problems that caused delays in surgeries.

The process of transferring Kaiser's 2,000 kidney patients has taken longer than expected. When Kaiser first announced the program's shutdown, Kaiser officials and state regulators expected it to take weeks to transfer patients. Now state officials expect that the transfers won't be completed until the end of the year.

"The procedure is complex," Randolph said about the transfers. "It's a process between three different hospital systems, and we are individually evaluating every file."

Pending completion of the transfers, Kaiser physicians are performing transplant surgeries as organs become available. As of Tuesday, 295 patients had been transferred to UC Davis or UCSF. Twelve surgeries have been performed at Kaiser's San Francisco center. Nine Kaiser patients have had their surgeries conducted at university hospitals.